2014 Best of the Best: Year in Review

2014 was certainly a joyful year in the insurance distribution industry.

MarshBerry recently released the 2014-2015 Market & Financial Outlook Report outlining key statistics and trends within the agent and broker space. Out of the more than 100 statistics produced in the survey, there was nothing more jubilant than a reported 22 percent year-over-year increase in agency valuation. Historical investments in privately-held agencies have produced favorable investment results, but based on our numbers, 2014 was the best in the past decade.

Still, despite very strong results, most of the performance is being driven not by better new business performance, but rather improved industry and economic fundamentals (a.k.a. uncontrollable factors). The best firms in the industry, however, leverage the recent economic improvements as a spring board for growth, not the sole provider of it. Owners and managers position these firms to produce high single-digit growth even in weaker economic environments. Therefore, with the economic and industry lift in 2014, these firms averaged double-digit growth rates.

So, where did your 2014 results stack up against the best firms in the industry?

*Profit is calculated as based on earnings before interest, taxes, depreciation, and amortization (EBITDA) and is a percentage of agency total commission and fees, which does not include overrides, contingency, or miscellaneous income.

*Reported EBITDA numbers are actual results and have not been adjusted to remove any extraordinary expenses, inflated compensation numbers, or non-recurring expense items.

*Growth is calculated on total commission and fees growth which does not include overrides, contingency, or miscellaneous income. This includes acquired and organic growth

*The numbers produced in this report are taken from MarshBerry’s proprietary benchmarking tool Perspectives for High Performance (PHP). Best of the Best are a hand-selected group of agencies who have produced historically strong results in growth, profitability, staffing metrics, and the firm’s current capital position.